To Our Clients and Friends,

Two years ago, as we started this new decade and shared our Investment Outlook, I quoted Bill Gates who said, "We tend to overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten." I would like to acknowledge that I got that wrong! We did not anticipate the most serious health crisis the world has experienced in a century, which would shut down 60% of the global economy in March of 2020 – the steepest economic decline ever.

We now know that this decline was followed by the fastest recovery ever, with corporate profits and global GDP now exceeding pre-pandemic levels. It is a testament to the brilliance of scientists, the speed of governments and central banks, and the heroism of health professionals and essential workers across the economy, including my colleagues at BNY Mellon. In March of 2020, our CEO, Todd Gibbons, outlined three priorities for our company: the health and safety of our employees; service to our clients; and support for the financial system and our communities. Our offices have remained open and our work for the financial system, our communities and you has continued thanks to the dedication of our own essential employees.

The path from March of 2020 to today has been anything but linear. The trip brings to mind iconic rollercoasters built in theme parks across the United States in the 1920s: wooden and rickety, with scary ups and downs taken at high speeds. Our expectations for the path ahead include: 

• A turning point: In 2022, we see a year of transitions: to improving global health; to moderating economic growth, inflation and market returns; and to returning to our offices at scale. We will step off the rollercoaster with relief, yet with grief for more than five million lives lost. We expect a soft landing, supported by growing vaccine supplies, new anti-viral drugs, and ample savings and liquidity, with no global recession in sight. We believe we are transitioning to a new phase, perhaps more akin to another iconic theme park ride from the 1920s – bumper cars – firmly tethered to the ground, yet with bumps along the way as the global recovery matures.
  
  
• A roadmap from the past: Our 2022 Investment Outlook reflects on other similarities we see to the post-pandemic 1920s, as well as the post-war 1950s, with an acknowledgement of the inflationary 1970s, too. We believe that the two powerful forces that have dampened inflation for the past 20 years – aging demographics across the world's largest economies and technological disruption – remain in place. We also believe the pandemic has added a third inflation dampener – productivity growth. We see lasting productivity gains across the economy, including in retail, healthcare, manufacturing and financial services.
  
  
• Advancing productivity: In our business, digitalization is enhancing our productivity, and we hope yours too. It is changing how we open accounts, underwrite loans, customize portfolios, manage after tax returns and develop personal plans to sustain your wealth through our Active Wealth framework and our AdvicePath tool. While we were on the rollercoaster this year, my colleagues earned eight wealth management industry awards for innovation, advice and digitalization. Across the company, we believe blockchain technology has the potential to speed transfers and transactions, facilitate security issuance, and digitize money. We are committed to being a leader and a trusted partner to you and the financial system as this technology develops.
  
  
• Looking ahead: Time is an investor's biggest asset. And so each year, we produce forward-looking capital market assumptions to project returns over the next decade. This year's projections take into account higher inflation and more modest returns.  

The past two years have been historic in so many ways. They have changed our lives and the global economy. We have confidence in the global recovery and our ability to navigate this decade together – no matter which theme park ride comes at us next.

Thank you for the trust you place in us every day. We are committed to continuing to earn it. We wish you happy and healthy holidays with the people and in the places that are most important to you.

Catherine Keating

Chief Executive Officer, BNY Mellon Wealth Management & Investor Solutions